Buying a condo can be the best investment or the worst investment you will ever make. A wrong move will see most of your money get used up as maintenance fees by property management companies. There are very many condos facing foreclosures and delinquencies. However, all is not lost, it is still possible to get good condo deals. You need to ask the right questions, and consider some factors, though.
Tips for buying a condominium
1. See it as a business opportunity
Just like any other business opportunity, you need to find out the vital aspects like financial stability, how the place is managed, general community stability, and any other issues. Get a copy of the association’s budget. The seller, being the owner can ask for a copy of the association’s budget and give it to you, as a potential buyer. Look out for things like the outstanding debt owed to the association, and the percentage of owners who are not paying their dues.
You also need to know the monthly fees. This allows you to budget efficiently. Look out for fluctuating fees or hidden costs. Ask for all the paperwork that you can.
2. Know yourself
You need to be very honest with yourself. Would you enjoy the community life in condos? Are you married? Do you have pets? What is your mode of transportation? Will you need extra storage space? You need to consider your needs and preferences before you choose a condo to buy. The needs and preferences may vary, though, depending on whether you are buying the property to rent it out or make it your home. You need to make present considerations and even considerations for the near future. Get to know the rules, restrictions, by-laws, and corporation declarations. Check whether they are regulations that you can live by.
3. Go for board meetings
You may want to attend board meetings if there are any coming up soon before you buy a condo. Before you go for such a meeting, read the meeting regulations to actively participate. Here, you will get some insider information about the condo that will help you make a more informed decision.
4. Check for insurance
This is something that many potential condo buyers overlook. Sometimes, the reason a condo may be cheap is that they dropped the insurance coverage or reduced it. This is a bad move for all the investors and stakeholders. Ask for the building’s insurance policy (master policy). Inquire from a reputable insurance agent on whether it is adequate. If the insurance is inadequate, it can make the condo ineligible for financing. Lenders see your condo as collateral.
5. Emergency funds
Some condo owners may be required to contribute to an emergency fund. The money is used for maintenance and general upkeep. Ask whether you are required to contribute towards such a fund as a condo owner.
Buying a condo is a decision that you need to make very consciously. Have all the facts right before you sign anything. You may save yourself a lot of trouble.